SarasotaPossible Inc. (SP) is a manufacturer of toaster ovens. To improve control over operations, the president ofSP wants to begin using a flexible budgeting system, rather than using only the current master budget. The following data are available forSP's expected costs at production levels of97,200,108,000, and118,800units.

Variable costsManufacturing$7per unitAdministrative$4per unitSelling$3per unitFixed costsManufacturing$172,800Administrative$86,400

(a)

Prepare a flexible budget for each of the possible production levels:97,200,108,000, and118,800units.(List variable costs before fixed costs.)

SARASOTAPOSSIBLE INC.

Flexible Production Cost Budget

select an opening flexible budget report item

Variable Costs

Activity Level

Total Fixed Costs

Total Variable Costs

Administrative

Manufacturing

Selling

Production Levels

Total Costs

Fixed Costs

select an item

Administrative

Fixed Costs

Variable Costs

Total Variable Costs

Manufacturing

Production Levels

Total Fixed Costs

Total Costs

Activity Level

Selling

enter a number of unit

enter a number of unit

enter a number of unit

select an opening name for section one

Administrative

Production Levels

Activity Level

Selling

Variable Costs

Total Variable Costs

Fixed Costs

Total Fixed Costs

Total Costs

Manufacturing

select an item

Selling

Manufacturing

Administrative

Total Variable Costs

Total Fixed Costs

Fixed Costs

Total Costs

Production Levels

Activity Level

Variable Costs

$

enter a dollar amount

$

enter a dollar amount

$

enter a dollar amount

select an item

Production Levels

Total Costs

Selling

Manufacturing

Activity Level

Fixed Costs

Total Fixed Costs

Administrative

Total Variable Costs

Variable Costs

enter a dollar amount

enter a dollar amount

enter a dollar amount

select an item

Total Costs

Variable Costs

Production Levels

Selling

Total Fixed Costs

Activity Level

Total Variable Costs

Administrative

Manufacturing

Fixed Costs

enter a dollar amount

enter a dollar amount

enter a dollar amount

select a closing name for section one

Production Levels

Manufacturing

Selling

Fixed Costs

Total Costs

Total Variable Costs

Total Fixed Costs

Variable Costs

Activity Level

Administrative

enter a total amount for section one

enter a total amount for section one

enter a total amount for section one

select an opening name for section two

Total Fixed Costs

Total Costs

Variable Costs

Total Variable Costs

Selling

Administrative

Fixed Costs

Activity Level

Production Levels

Manufacturing

select an item

Total Costs

Variable Costs

Activity Level

Administrative

Production Levels

Selling

Fixed Costs

Total Fixed Costs

Total Variable Costs

Manufacturing

enter a dollar amount

enter a dollar amount

enter a dollar amount

select an item

Total Costs

Manufacturing

Variable Costs

Administrative

Production Levels

Selling

Total Variable Costs

Activity Level

Fixed Costs

Total Fixed Costs

enter a dollar amount

enter a dollar amount

enter a dollar amount

select a closing name for section two

Fixed Costs

Selling

Manufacturing

Administrative

Total Variable Costs

Variable Costs

Total Fixed Costs

Total Costs

Production Levels

Activity Level

enter a total amount for section two

enter a total amount for section two

enter a total amount for section two

select a closing flexible budget report item

Manufacturing

Total Costs

Production Levels

Total Fixed Costs

Total Variable Costs

Selling

Activity Level

Variable Costs

Fixed Costs

Administrative

$

enter a total dollar amount

$

enter a total dollar amount

$

enter a total dollar amount

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(b)

IfSP sells the toaster ovens for $16each, how many units will it have to sell to make a profit of $64,800before taxes?

Units to be soldenter a number of units to be sold